Single Entry and Double Entry Accounting

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Single entry accounting/Cash accounting. This system records only cash movement of transactions and that too up to the extent of recording one aspect of the transactions. This means that only receipt or payment of cash is recorded and no separate record is maintained (about the source of receipt and payment) as to from whom the cash was received or to whom it was paid. Double entry book keeping/Commercial accounting. Double entry or commercial accounting system records both aspects of transaction i.e. receipt or payment and source of receipt or payment. It also records credit transactions i.e. recording of Electricity Bill or accruals of Salary payment etc. This concept will be explained in detail in the next lectures but for the time being it should be noted that in cash accounting date of receipt / payment of actual cash is important while in commercial accounting the date on which the expense is caused (whether paid or not) as well as the spreading of the cost of c
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CLASSICAL VIEW OF MANAGEMENT (SCIENTIFIC AND BUREAUCRATIC)

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Classical Viewpoint is divided into three parts:
 
1.  Scientific management
2.  Bureaucratic management
3.  Administrative management

1.  Scientific Management:
Scientific managementis defined as the use of the scientific method to define the “one best way” for a job to be done.
 
Important Contributions:
Frederick W. Taylor is known as the “father of scientific management”. Taylor’s work at the Bethlehem Steel companies motivated his interest in improving efficiency.
 
1.  Taylor sought to create a mental revolution among both workers and managers by defining clear guidelines for improving production efficiency. He defined four principles of management.
 
2.  His “pig iron” experiment is probably the most widely cited example of scientific management.
 
3.  Using his principles of scientific management, Taylor was able to define the one best way for doing each job.
 
4.  Overall, Taylor achieved consistent improvements in productivity in the range of 200 percent. He affirmed the role of managers to plan and control and of workers to perform as they were instructed.

Frederick Winslow Taylor (1856-1915)was the first nationally known management thinker. His “Taylorism” or “scientific management” was a major contribution to business operations as we know them today. The overview of his studies is given below:
 
a  Taylor developed scientific management to counter the problem of soldiering by workers—deliberately working below full capacity.
 
b  Taylor pioneered the time-and-motion study, where by a work task is broken down into its various motions, is improved by eliminating unnecessary motions, and then the motions timed to determine optimal daily production.
 
c  Through his four principles of scientific management, Taylor advocated scientific study of the task to find the best work method rather thanrelying on traditional methods handed down from one worker to another.
 
d  Taylor successfully implemented his theory at Bethlehem Steel in two famous studies involving shoveling and pig-iron handling.
 
e  Although real and imagined abuses or misuses of scientific management occurred (leading in one instance to a congressional investigation—and thereby adding to Taylor’s notoriety), Taylor’s strong support of science and his redefining the role of managers remains his primary contribution to management theory.

Taylor’s Four Principles of Scientific Management:
 
1.  Study each part of the task scientifically, and develop a best method to perform it.
2.  Carefully select workers and train them to perform a task using the scientifically developed method.
3.  Cooperate fully with workers to ensure they use the proper method.
4.  Divide work and responsibility so management is responsible for planning work methods using scientific  principles and workers are responsible for executing the work accordingly.

Frank and Lillian Gilbreth (1868-1924 and 1878-1972 respectively):
 
They did studies aimed at eliminating unnecessary motions and way of reducing task fatigue.

a.  They perfected the time-and-motion study techniques first introduced by Taylor.
b.  Together they provided the first vocabulary for identifying hand, arm, and body motions used at work—which they called “Therbligs.”
c.  Lillian’s doctoral dissertation was published as the book, The Psychology of Management,one of the first books published on the findings of psychology in the workplace.
d.  Frank “proved” the value of motion studies in his own construction company whose productivity was nearly three times better than his competitors who used the older work methods.

Henry L. Gantt (1861-1919)
One of Taylor’s closest associates is best known for his Gantt chart, a graphic aide to planning, scheduling, and controlling. His other interests included a uniquepay incentive system and the social responsibility of business.
 

How Do Today’s Managers Use Scientific Management?

To understand why scientific management was viewed as such an important development, you need to look at the times in which Taylor, the Gilbreths, and other scientific management advocates lived.
 
1.  It was important because it could raise countries’ standards of living by making workers more productive and efficient.

2.  Also, it’s important to remember that manyof the tools and techniques developed by the scientific management practitioners are still used inorganizations today.

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